Correlation Between TEXAS ROADHOUSE and HAVERTY FURNITURE

Can any of the company-specific risk be diversified away by investing in both TEXAS ROADHOUSE and HAVERTY FURNITURE at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining TEXAS ROADHOUSE and HAVERTY FURNITURE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TEXAS ROADHOUSE and HAVERTY FURNITURE A, you can compare the effects of market volatilities on TEXAS ROADHOUSE and HAVERTY FURNITURE and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in TEXAS ROADHOUSE with a short position of HAVERTY FURNITURE. Check out your portfolio center. Please also check ongoing floating volatility patterns of TEXAS ROADHOUSE and HAVERTY FURNITURE.

Diversification Opportunities for TEXAS ROADHOUSE and HAVERTY FURNITURE

0.63

Correlation Coefficient

TEXAS ROADHOUSE  HAVERTY FURNITURE

Poor diversification

The 3 months correlation between TEXAS and HAVERTY is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding TEXAS ROADHOUSE and HAVERTY FURNITURE A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HAVERTY FURNITURE and TEXAS ROADHOUSE is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on TEXAS ROADHOUSE are associated (or correlated) with HAVERTY FURNITURE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HAVERTY FURNITURE has no effect on the direction of TEXAS ROADHOUSE i.e., TEXAS ROADHOUSE and HAVERTY FURNITURE go up and down completely randomly.

Pair Corralation between TEXAS ROADHOUSE and HAVERTY FURNITURE

Assuming the 90 days trading horizon TEXAS ROADHOUSE is expected to generate 2.09 times less return on investment than HAVERTY FURNITURE. But when comparing it to its historical volatility, TEXAS ROADHOUSE is 1.55 times less risky than HAVERTY FURNITURE. It trades about 0.09 of its potential returns per unit of risk. HAVERTY FURNITURE A is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1,389  in HAVERTY FURNITURE A on April 23, 2025 and sell it today you would earn a total of  301.00  from holding HAVERTY FURNITURE A or generate 21.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

TEXAS ROADHOUSE  vs.  HAVERTY FURNITURE A

TEXAS ROADHOUSE

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TEXAS ROADHOUSE are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, TEXAS ROADHOUSE may actually be approaching a critical reversion point that can send shares even higher in August 2025.

HAVERTY FURNITURE

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HAVERTY FURNITURE A are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, HAVERTY FURNITURE reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TEXAS ROADHOUSE and HAVERTY FURNITURE

The main advantage of trading using opposite TEXAS ROADHOUSE and HAVERTY FURNITURE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TEXAS ROADHOUSE position performs unexpectedly, HAVERTY FURNITURE can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in HAVERTY FURNITURE will offset losses from the drop in HAVERTY FURNITURE's long position.

The idea behind TEXAS ROADHOUSE and HAVERTY FURNITURE A pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the FinTech Suite module to use AI to screen and filter profitable investment opportunities.